Philip Morris International, the tobacco company and maker of Marlboro cigarettes, has struck a £1bn deal to buy Vectura, the British pharmaceutical company developing a pioneering inhaled treatment for Covid-19.
The £1.04bn offer by Philip Morris International (PMI), which is investing billions to move away from its core tobacco business, trumps the £958m tabled by the private equity group Carlyle in May. Vectura’s board had recommended that shareholders accept Carlyle’s offer but withdrew support for that bid after receiving the higher offer from PMI.
“We recognise the material increase in the price offered to shareholders under the acquisition when compared with the Carlyle offer and have accordingly recommended the acquisition to shareholders,” said Bruno Angelici, Vectura’s chairman.
“The acquisition will provide our people with the opportunity to form the backbone of an autonomous inhaled therapeutic business unit of PMI, helping develop products to improve patients’ lives and address unmet medical needs.”
Vectura shares jumped more than 12% to 153p on Friday morning, making it the top riser on the FTSE 250. The cash offer from PMI is 150p a share.
PMI, the maker of the world’s most popular cigarette brand, has invested more than $8bn (£5.8bn) to date in diversifying its business away from harmful tobacco products as “part of a natural evolution into a broader healthcare and wellness company” to “accelerate the end of smoking”.
Last week, PMI spent $820m buying the nicotine gum maker Fertin Pharma.
PMI aims to make $1bn in revenues from “beyond nicotine” products by 2025 and has identified respiratory drugs as a key focus. It aims to be “predominantly smoke-free” by 2025, when tobacco revenues will account for less than half of total income.
PMI said Vectura will operate as an “autonomous business unit” and form the “backbone” of PMI’s inhaled therapeutics business.
“The market for inhaled therapeutics is large and growing rapidly, with significant opportunities to address unmet needs,” said Jacek Olczak, the chief executive of PMI. “By joining forces and investing our resources in the continued scientific excellence of our two companies we can secure critical capabilities to accelerate our long-term growth in beyond nicotine products, which is a core strategic focus for PMI.”